Mixing Budweiser and Coors would be too much for the beer market to swallow, according to a lawsuit just filed by the Justice Department seeking to block Anheuser-Busch InBev's merger with Mexican brewing giant Grupo Modelo.
Today, the assistant attorney general in charge of the Department of Justice's Antitrust Division Bill Baer issued a statement saying that the DoJ will sue to prevent a $20.1 billion deal that could crush competition in the U.S. beer market. Baer writes:
If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers. This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.
Recent years have seen a lot of consolidation in beer ownership. In 2008, InBev (the Belgian company that owns Stella Artois and Beck's) bought Anheuser-Busch (the American maker of Budweiser, Rolling Rock, and Michelob, among other brands). It currently owns half of Grupo Modelo (their beers include Corona, Pacifico, and Modelo), but has been trying to buy the other half since the summer of 2012. The DoJ is now arguing that when you throw all those beers together under the same ownership, you get a monopoly.
The move might look like a win for local microbreweries, but specialist beer makers still have reason to be concerned about the beer market behemoth. As The Wall Street Journal's Mike Esterl reported last week, InBev is plotting an entrance into the "craft" beer market at the same time as they work on bulking up their mass market offerings. You want a "peppermint stout," a beer with "caramel-like notes," or a blend with hints of "hibiscus flowers?" Anheuser-Busch has you covered, apparently.